1. What should I be looking for to make it a fast server. Is 512mb RAM enough? I was looking at an "Intel Pentium 4, 2.0" 7200RPM. Should I go with 1GB RAM?
To be honest, they're all the same. 2.4 GHz with 512 MB is enough for what you're doing. 1 GB isn't much more if it really botheres you.
2. What is Cogent bandwidth? What is level 3 bandwidth?
Cogent is a cheap bandwidth provider who is unreliable. Hosting companies can buy bandwidth from cogent wholesale for as little as $15-$20/per mbit, or per 320 Gigs per month.
Level3 is a Tier 1 backbone that actually owns a lot of fiber in the world.
www.level3.com for more details about them. Their bandwidth is infinitely better than Cogent's, but is also a lot more expensive.
3. Unmanaged servers are affordable but I've only installed a few php, mySQL and CGI scrpits on Revshare hosting. Do you think I could set up an unmanaged dedicated server by myself, just by reading and learning on forums? I only want to set up thumbnail preview scripts and other basic scripts...
You should set up a managed server, and play around with it at the same time to learn about it. I know of a hosting company (very good network) that charges the same for managed/unmanaged at a reasonable price.
4. What do you recommend (easier to configure and general use):
Plesk 6.0
Ensim Pro 250
cPanel
Plesk 5.0
Ensim Basic
Red Hat 9
Red Hat 7.3
Get a managed server so you dont have to worry about it. I won't mention hosting company because I don't want to spam you.. they are dear friends and spent hundreds of thousands on their network infrastructure, and have 24/7 support staff actually in the data center. Even the night people know what they're doing. If interested, post here.